Annuities

3 Ideas to Quickly Generate Profit


Annuities

If you’re like me, you run a business. And, you do so for profit – for you or for your stakeholders. 

 

Profit can be summarized by an income statement showing gross revenue, expenses, and net profit. But, I think it’s broken down to two factors: effectiveness and efficiency. The better you can execute on these factors, the greater your profit will be. In order to do that, you have to work smarter, finding ways to generate top-line revenue while minimizing client acquisition costs. 

 

One of the fastest ways to generate new revenue is to capture a greater share of your clients’ wallets – or more market share of household investments. Creating a new stream of income from existing clients drastically reduces the cost of acquiring a new relationship. 

 

But how do you create additional revenue without exposing your assets? 

 

  • First, repurposing old assets make sense as you position your clients for retirement. Many have changed jobs throughout their careers and let assets simply accumulate in former employers’ qualified plans or individually owned IRAs. Those assets should be considered for lifetime income assets. By positioning guaranteed income in the portfolio, you can reallocate the assets under management to meet longer term goals, as well as gain tax efficiency and the potential for growth. If positioned properly, many of these assets can be placed on trail-based compensation to create recurring income for your financial practice.

 

  • Second, many old assets have beneficiary designations that have not been reviewed. Our firm commissioned a white paper by a respected ERISA attorney that identifies the risks of qualified plan beneficiaries. Taking the time to review and rename beneficiaries can save a family thousands of dollars in income taxes at the time the asset transfers to the next generation. By leveraging this savings, you have the potential to gain the confidence of the next generation. So, reviewing asset beneficiaries has the effect of repurposing the asset as well as creating a bridge to future clients.  

 

  • Third, as our clients near retirement, many will want to take Social Security. Using an unused asset to create a bridge has proven to be a positive move for many clients. The bridge – in the form of a single-premium immediate annuity – allows the client to receive the same income as an early election from Social Security. However, the strategy generates more than $122,000 more in income from age 70 to 90. The increased leverage from social programs protects assets under management and allows for a positive conversation with the next generation as well. 

 

Looking within your own client base makes your business more efficient. Your existing clients provide the fastest path to new revenues – many of which can be recurring. 

 

With so many Americans afraid of running out of money in retirement, you have a chance to provide assurances that your clients will maintain the standard of living they are planning for. When your activities focus on ways to be effective and efficient, the chance of increasing your profits grows exponentially. 

 

Winning Strategy

To draw profit for your business, look inward. You will earn more business from your existing clients with quality ideas. This creates additional revenue, plus opportunities to be introduced to the next generation. 

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

Practice Management Retirement Annuities

Longevity for Your Practice


Annuities

You likely spend a lot of time talking about the importance of longevity planning for your clients. But, have you thought about longevity for your practice? 

 

Recently, I was reading an article from a practice management expert who was answering some questions about an advisor’s succession planning. It made me think how prepared we are as an industry to provide ongoing service to our clients in the event of catastrophic events. We talk to our clients about mitigating risks in retirement, but we don’t necessarily talk about the risk of losing an advisor. 

 

I think it’s an important consideration for us to evaluate, especially now. Part of working in your clients’ best interest might include having a strategy for your office to make sure you continue servicing your clients after you leave the business – by your own choice or due to an external event. Think about how you would feel if you put your entire trust into a relationship with someone, and then that person suddenly left. Wouldn’t you feel better if you knew there was a plan in place to continue taking care of you? 

 

Sound Familiar?

This article focused on several mid-50s principals who did not have official succession plans. Children were going to step into the businesses if a health event forced the principals out … However, neither the staff nor the clients were aware of these plans. The children probably were not aware of his plans either, given that they had successful careers elsewhere. Unfortunately, this scenario is common among financial professionals. 

 

With our clients in focus, we must have better plans for our retirement – which might come tomorrow due to a health event, or in a few years due to a simple desire to slow down. Regardless of timing, you owe it to your clients to give thought to the consequences. You also owe it to your employees, your families, and the industry.  

 

Look in the mirror and ask yourself, “Have I created a full, holistic plan for the orderly transition of my business? And, is it up to date?” If not, you need to devote time and energy to helping yourself first, so you can impact more clients and prospects with confidence. 

 

Winning Strategy

Think about how you will exit the business. What would your clients think if you were not at your firm tomorrow or the next day? You need to plan for the orderly transition of your business so you can instill confidence in your clients and communities.  

 

Learn More

The marketplace is demanding financial professionals to work in our clients' best interest, which will not only need to address retirement income, but also the risk of longevity.

Download the e-Book Here!

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.

Longevity Practice Management Succession Planning

Longevity and Golf


Annuities

The title might make you think that I will be talking about how to spend your retirement years.  Without a doubt, many people spend more time driving a golf cart around the course, or their neighborhood for that matter, during retirement. However, longevity and golf share other commonalities in the retirement income space.  

 

In 2016, Dustin Johnson was at the top of the money list for the PGA tour, earning more than $9.3 million.* (This does not account for his endorsements, just his winnings from the 22 tournaments he played in 2016.) One of the reasons he won so often or ended close to the top of the leaderboard when he played was his putts per hole. For the entire season, Dustin Johnson putted 1.71 times per golf hole. 

 

The 100th best PGA golfer for 2016, Adam Hadwin, earned $1,067,809 – just 11.4 percent of what Dustin earned earned for the same season. Adam played in slightly more tournaments throughout the year, too. His putting average was 1.77 putts per hole … just .06 strokes more.  But, that little difference in putting made an $8.2 million difference in income. 

 

Fortunately for Adam, he has a chance to learn from his experience, and he will likely earn more throughout the rest of his career. In fact, in 2017, he has already won a tournament and matched his previous year’s income.  

 

Sink Your Putts

Unfortunately, our clients don’t get the same opportunity to rebound in retirement. Instead, they make largely irrevocable decisions when they leave their working years, so they have to get it right the first time. Like putting, the smallest movements can have huge consequences. 

 

We must guide our clients through the complexities of longevity. A major health event that requires home health care or skilled nursing might demolish the assets a person has saved. And, simply living too long creates added stress on their ability to keep pace with inflation. All are real problems that, for the most part, have to be dealt with when your clients stop working and start living off their accumulated assets. 

 

Minor tweaks like asset allocation may improve or lessen a portfolio’s ability to sustain itself through a systematic spend down over the rest of a retiree’s life. You should take time to learn about new techniques and products for your clients. With new risks surrounding longevity and retirement income planning in general, you owe it to your clients to be innovative, creative and purposeful in your planning. Just like practicing your putting, practicing your profession can make a big difference for your clients and prospects. 

 

Winning Strategy

Keep current with new products and strategies to your give your clients the best opportunity for success. When you concentrate on the small things you can tweak, you will likely have profound differences in your clients’ retirement success.

 

Learn More

The marketplace is demanding financial professionals to work in our clients' best interest, which will not only need to address retirement income, but also the risk of longevity.

Download the e-Book Here!

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

 

*PGA Tour Official Money Board, 2016: http://www.pgatour.com/stats/stat.109.2016.html

Retirement Annuities Practice Management